Open-Sourcing Equal’s Framework For COVID-19 Scenario Planning
Over the past few weeks, we’ve been working with our portfolio founders to analyze the impacts of COVID-19 on their companies and the…
Over the past few weeks, we’ve been working with our portfolio founders to analyze the impacts of COVID-19 on their companies and the industries they operate within and develop plans to mitigate those impacts.
Given the degree of uncertainty around the pandemic, founders need to have plans for a variety of potential scenarios. To facilitate this planning, we created a standardized framework for use across our portfolio that we wanted to make available to the broader community. This activity is meant to be a forward-looking exercise to discuss impacts of the crisis to date, analyze the effects that different scenarios may have on the business, and develop an appropriate plan of action.
Our suggestion is that founders use this template to better structure the current and potential impacts of the crisis, determine what potential actions they can take and to use the document to facilitate thoughtful planning with their key stakeholders (executive teams, investors, board, etc.). During wild times like these, we find that being able to logically structure and share information is critical to effective decision making and hope that this document serves as a starting point to discuss appropriate plans of action and drive alignment across your stakeholders.
We’ve broken the document up into 3 key sections:
IMPACTS TO DATE: These are objective facts that you can use to define the immediate impacts of COVID-19 on your business. While the environment is changing, having a factual baseline for where you were and where you are should help you and your stakeholders understand how severely the crisis has impacted your business.
SHORT TERM IMPACTS: This is the beginning of a scenario planning exercise to help you determine how your business would fare in the year to come given a variety of COVID-19 scenarios. While no one can predict how long this crisis will go on, understanding the implications of these scenarios should help you and your stakeholders determine downstream impacts and if additional immediate steps need to be taken.
LONG TERM IMPACTS: In this section, we discuss life after the crisis and how it impacts the longer-term viability of your business and the assumptions underlying your business. Some categories will experience more long term impacts than others, but regardless of category, new operating conditions will emerge across the board. While it’s hard to be on the offensive right now, this is a great place to discuss how COVID-19 may create more favorable business dynamics for your company down the road and help founders corral support for the business during these tough times.
To make it a bit easier for others to use, we’ve filled out the template for an imaginary seed-stage SaaS company. Companies in different categories will likely have very different inputs and parameters, so please make sure to personalize the template to the nature of your business.
We’d love any feedback or suggested modifications you have (https://twitter.com/equalventures). The completed version and a clean copy of the template can be found here.
